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Susser Sets IPO Terms

The company expects to raise $93.3 million to be used to repay debt, for growth capital.

July 20, 2006, 08:00 pm

CORPUS CHRISTI, Texas -- Susser Holdings Corp., which operates more than 300 convenience stores in Texas and Oklahoma, announced the terms for its initial public offering (IPO) yesterday. The company set its initial IPO at 6 million shares for an estimated price of $16 to $18 each, according to a report by Reuters.

The underwriters will have the option to buy an additional 900,000 shares to cover over-allotments, Susser said in an amended U.S. Securities and Exchange Commission filing. The company, also a wholesale distributor of motor fuel, expects to raise $93.3 million through the IPO, with plans to use the funds to redeem senior notes, repay debt and for general corporate purposes, including growth capital, Reuters said.

Assuming an offering price of $17 per share -- the midpoint of the range -- the company will have an initial market capitalization of $262.4 million. The Corpus Christi, Texas-based business intends to list its stock on the Nasdaq under the symbol "SUSS."

Susser announced in mid-May that it was taking the company public. At that time, SEC papers showed it intended to raise $115 million in its initial public sale of common stock. As part of that same announcement, the company reported plans to rebrand all its c-stores to its proprietary Stripes brand during the second half of 2006.

As of April, Susser's retail segment operated 319 convenience stores in Texas and Oklahoma, with 314 locations operating under the Circle K name, the filing said. The name change coincides with the expiration of a licensing agreement with the TMC Franchise Corp. for the use of the Circle K name. The company expects the name changes to cost $5.5 million to $7.5 million, according to news reports.

Susser Holdings reports itself as "the largest independent convenience store operator and the largest non-refining motor fuel distributor in Texas." The company distributed 809.5 million gallons of fuel last year. It is among the nation's largest distributors of Citgo and Chevron fuel and a significant distributor of Conoco, Exxon, Shell and Texaco branded fuels, according to its initial SEC filing.